Question

You want to open up a custom skate board shop. You can sell each skate board for $160. It takes 3 hours to make each skate board. Each skate board maker earns $25 per hour. Each skate board costs $15 in raw materials. You estimate that your fixed costs are $20,000 per month.
a. What is the contribution margin?
b. How many skate boards must be sold each month in order to break even?
c. What is the breakeven dollar amount?
d. How many skate boards must be sold to earn a $10,000 profit each month?
e. What is your total monthly revenue if you want to earn a profit of $8,000?